More than 10 years after arriving in Australia as a backpacker with only $2,000 in his pocket, Michael Ossitt and his wife are now well into their property investment journey with six properties to their name. However, their financial transformation did not come easy.
As in most cases in property investment, the couple had to get through hurdles, including getting stuck in the comfort of familiar areas. They saved hard for the first few years and rented on the Lower North Shore before eventually buying their first property and principal place of residence – a two-bedroom unit in Manly Vale, which Michael described as “a bit of a strange suburb”.
Despite the stigma surrounding the area, Michael and his wife loved it and decided to buy another property in Manly Vale.
While there may be advantages in purchasing properties in your own backyard, the property investor believes that it’s a mistake to invest in an area only because one knows it well.
He told Smart Property Investment: “In hindsight, it was one of those things that people make the mistake of now buying an investment in their backyard because they know it well. I think the fundamentals were still there when we did the research and decided to do it. Still a growing suburb with great potential, and it’s one of those areas – it was the poor cousin of the suburbs around. You’ve got Balgowlah, Fairlight ... and Manly Vale was always that bit cheaper. It’s probably caught up.”
According to Michael, they started to target infrastructure, investment and population growth in their research for the next properties to buy. “All those fundamentals that you’ve got to follow before you make a decision to buy in an area,” he said.
The couple admitted that it took some mental adjustment before they finally decided to branch out and invest in other areas, but they were glad to have grown into more sophisticated investors by being more discerning about their property investments.
Years into their journey, Michael and his wife could now purchase properties without having to see them on-site through the help of their financial team.
“I think it’s just understanding the fundamentals of the area. So you’ve done all the research on the micro stuff and then you get down to the macro. Understand the property type and the area that it’s in, and then leverage help on the ground in those areas. Using a really good property manager that comes on a recommendation, look at the properties for you and get advice that way. Then, obviously, get in a building and pest inspection done to really cover off that risk that the property is not a lemon,” he said.
Michael concluded: “I think once you’ve covered all of those bases and that yield is right, the demographics is right, then you’ve gone a long way to reducing your risks.”
Tune in to Michael Ossitt’s episode in The Smart Property Investment Show to know more about his strategy to achieve a financial transformation, as well as how he determines the difference of cosmetic issues and structural faults in property.